Stop Trading!

Return to Article

Jim Cramer's Stop Trading! Buy a Lender

TheStreet.com Staff

Subprime lenders are a solid business right now, because credit losses aren't a concern, Jim Cramer said on CNBC's "Stop Trading" segment Wednesday.

Even so, companies such as Accredited Home Lenders (LEND) have stumbled as competition has eroded their margins.

"What hurt them was not the credit quality but that Bear (BSC) moved into the game and Merrill (MER) moved into game," he said. "It's a margin-shred story."

Cramer said investors don't need to worry about defaults or a slowdown in lending because "we're nowhere near the red light on credit."

Switching gears, he was bullish on Devon (DVN), Ultra Petroleum (UPL) and Core Labs (CLB). "If Devon stays here, it will be bought by a European major," perhaps a name like Total (TOT) or BP (BP), he speculated.

Additionally, Duke Energy (DUK) is a "nice solid utility that grows," he said.